Are you a charity or community amateur sports club (CASC)? If so, then look into Gift Aid.
For every £1 that's donated, you could reclaim an additional 25p from the government.
We'll tell you how it works...
Guide to claiming Gift Aid
How Gift Aid works
The benefits
If you're registered as a charity or community amateur sports club (CASC) you could potentially increase your income from donations by 25% through Gift Aid.
Gift Aid is a government scheme that enables charities and CASCs to claim up to 25% on eligible donations they receive from UK taxpayers. Generally, for every £1 that is donated, an eligible organisation would be able to reclaim an additional 25p from HMRC.
Giving and receiving Gift Aid is quite simple
A donor completes a declaration form with key details, including confirmation that they pay enough tax for their donation to be eligible for Gift Aid. The receiving organisation then keeps records of these declarations and donations, to submit to HMRC to receive payment.
Gift Aid can be claimed on donations up to four years after the tax year they were received in.
Who can give and receive Gift Aid?
A club or community group is only eligible for Gift Aid if they are a charity or CASC and have been recognised as this by HMRC.
Gift Aid can be claimed on donations from UK taxpayers if they are making the donation on their own behalf and pay enough capital gains or income tax. The donor must complete a declaration confirming that they meet the tax requirements and that they are happy for Gift Aid to be claimed on their donation.
Any individual paying a higher tax rate (40% - 45%) can also claim back the difference between the standard rate used on their donation and the tax rate they pay, which can be extra motivation to donate.
For example, if someone paying a 40% tax rate donated £100, the donation will be worth £125 to the organisation if Gift Aid is claimed. The donor can also claim back £25 on the donation through a Gift Aid tax rebate.
Gift Aid Small Donation Scheme (GASDS)
For donations under £30, Gift Aid can be claimed without a declaration through the Gift Aid Small Donation Scheme (GASDS). As long as your organisation has already claimed Gift Aid during the same tax year, this is a simple way to claim Gift Aid.
Any claims through the GASDS can be made in the same way as Gift Aid. An organisation can claim up to £2,000 in one tax year through the GASDS, and up to £1,250 for the previous four years.
A record of donations with receipts, the date of collection and date it was paid into the organisation’s bank account must be kept for at least two years after a claim is made.
Making a Gift Aid declaration
Making a Gift Aid declaration
Unless the donation is less than £30, donors must complete a Gift Aid declaration form either on paper or online. As a minimum, the declaration should include:
- Your organisation’s name.
- The donor’s full name and address (including house number/name and postcode).
- The donation amount.
- A tick box to confirm the donation is eligible for Gift Aid based on the tax requirements, and that the donor is happy for Gift Aid to be claimed.
- Date of declaration.
If an individual has donated to the organisation within the last four years, or is likely to donate again, an option to back claim or extend the declaration to future donations can be added.
Declaration form templates
You can download declaration form templates (single donations or multiple donations) from HMRC.
Your organisation needs to have valid Gift Aid declaration forms for all donations it wants to claim against. All records, including declarations, need to be kept for at least two years after a claim has been made.
Donors need to notify you if there any changes to their eligibility or if their name or address changes, so ensure you add a statement about this to the declaration form.
HMRC may require the donor to pay any difference in the amount of Gift Aid claimed and tax paid, if their donations are not eligible.
How to claim Gift Aid
1
Nominate someone to take charge of your Gift Aid scheme and claims
This could be your Treasurer, other committee members or trusted volunteers.
Make sure they are fully informed regarding eligibility of donations, record keeping and the claims process.
Organisations should also ensure processes are in place to safely store any personal data.
Make sure they are fully informed regarding eligibility of donations, record keeping and the claims process.
Organisations should also ensure processes are in place to safely store any personal data.
2
Develop a declaration form and recording system
Create a declaration form that covers the key requirements, or use a template from HMRC.
Develop a system for ensuring that all declarations are stored securely.
For more information on keeping records, including how long to retain copies of declarations and other documents, head to the HMRC website.
Also, a GDPR toolkit is available from the Sport and Recreation Alliance with more information on secure data handling.
Develop a system for ensuring that all declarations are stored securely.
For more information on keeping records, including how long to retain copies of declarations and other documents, head to the HMRC website.
Also, a GDPR toolkit is available from the Sport and Recreation Alliance with more information on secure data handling.
3
Promote Gift Aid for your organisation
Once you are set up to receive Gift Aid, let people know.
Look at the best ways to get information about Gift Aid and the eligibility requirements to potential donors.
You could do this through internal announcements to all members, newsletters, social media posts or a local press release.
Look at the best ways to get information about Gift Aid and the eligibility requirements to potential donors.
You could do this through internal announcements to all members, newsletters, social media posts or a local press release.
4
Complete and submit your claim form
You will need to submit a list of all eligible donations, with Gift Aid declaration details, to HMRC.
You can do this:
- By post, using the ChR1 form, which you can get by contacting HMRC.
- Online on HMRC's website (you'll need to register for ‘Charities Online’).
Once registered you will need to complete the HMRC ‘schedule spreadsheet’ template and upload this to the Charities Online portal.
Up to 1,000 entries can be added to each schedule spreadsheet, and it is good practice to update it regularly.
There is no limit on the number of claims that can be made in a single tax year. However, if you make more than one claim in a year, it is suggested the value of claim should exceed £100.
You can do this:
- By post, using the ChR1 form, which you can get by contacting HMRC.
- Online on HMRC's website (you'll need to register for ‘Charities Online’).
Once registered you will need to complete the HMRC ‘schedule spreadsheet’ template and upload this to the Charities Online portal.
Up to 1,000 entries can be added to each schedule spreadsheet, and it is good practice to update it regularly.
There is no limit on the number of claims that can be made in a single tax year. However, if you make more than one claim in a year, it is suggested the value of claim should exceed £100.
Examples of how it works
Example 1:
The members of a club are looking to raise funds to replace club equipment. The club hosts a social night for members.
Each member is asked for an optional £10 donation. 50 members of the club attend and all donate the optional £10. The total value of donations equals £500.
If all members sign a declaration to confirm they are eligible for Gift Aid, the club could claim a further £125 in Gift Aid from HMRC.
The total value of donations therefore equals £625.
Example 2:
A community organisation has plans to modernise their pavilion and raise funds through Gift Aid. To achieve this, the committee asks members to make a voluntary donation at a suggested value of £30. The organisation will then claim Gift Aid on all eligible £30 donations.
If the organisation had a total membership of 100 and everyone donated, the donations would equal £3,000.
75 members paid enough tax to be eligible for Gift Aid, so the organisation can claim Gift Aid against these 75 donations (75 x £30 = £2,250) but not the remaining 25 (25 x £30 = £750).
The organisation would be entitled to claim £562.50 (25% of the £2,250) in Gift Aid from HMRC. The actual value of all donations would be £3,562.50.
